The U.S. Conference of Mayors
76th Annual Meeting
June 20-24, 2008
Miami

2008 ADOPTED RESOLUTIONS

FEDERAL HOME LOAN BANKS

WHEREAS, Federal Home Loan Banks (FHLBanks) are 12 regional government sponsored enterprises (GSEs) chartered by Congress in 1932 to provide liquidity to their 8, 100 financial institution members across the country ensuring the available funding for affordable housing and community development; and

WHEREAS, FHLBanks are authorized to serve the needs of America’s cities by providing their members low-cost financing for community development lending; and

WHEREAS, FHLBanks, through their Affordable Housing Program, have helped rehabilitate neighborhoods by providing over $billion in grants for affordable housing projects since 1990;and

WHEREAS, the housing mission of the FHLBanks has been expanded by Congressional and regulatory action to include providing resources for community and economic development; and

WHEREAS, Section 149(b) of the Internal Revenue Code permits GSEs such as the Federal National Mortgage Association and the Government National Mortgage Association to issue letters of credit on tax exempt bonds while excluding FHLBanks; and

WHEREAS, amending Section 149(b) by adding the FHLBanks to the list of GSEs would allow the FHLBanks to better carry out their ongoing mission of supporting housing and community and economic development lending; and

WHEREAS, obtaining credit enhancement from highly-rated FHLBanks, through their members for tax exempt bonds would significantly lower the costs to cities and therefore increase their capacity to create jobs and generate new tax revenue; and

WHEREAS, proposed legislation amending Section 149, passed by the U.S. House has been scored by the Joint Tax Committee at only $120 million over ten years, a loss of revenue that will be recouped many times over by local economic development,

NOW, THEREFORE, BE IT RESOLVED that The U.S. Conference of Mayors urges the Congress to pass an amendment to Section 149(b)of the Internal Revenue Code adding "any letter of credit issued by a FHLBanks" to the list of permissible letters of credit enhancing tax exempt bonds; and

BE IT FURTHER RESOLVED, that the U.S. Conference of Mayors support legislation, regulatory changes and other initiatives designed to expand the ability of FHL Banks to serve the housing, community and economic development and public finance needs of cities through their investment authority, introduction of new business activities, and development of new initiatives.